The More You Learn, the More You Earn. Sort Of.

It has been a widely-held belief that the more education one has, the greater the salary earnings over one’s lifetime. Then we heard statistics arguing that the Master’s degree was the new Bachelors, and without one you could not compete in today’s market. A new study released by the Census Bureau of the United States claims that both beliefs are correct. Indeed, the single greatest determiner of workers’ salary earnings is their education level.

Most studies around this are synthetic. That is, they “predict” a salary given the education level, and are not the actual money people have earned. Some are then cross-correlated with race and gender, and an estimated lifetime earning is produced.

However, this study looked at longitudinal data and came up with some interesting things. First, in the last 70 years, we have gone from having 23% of the population hold High School diplomas, to just over 80% holding them. Second, those with Bachelors degree have not risen at the same rate, with less than 5% in 1940 to just over 25% today, and only 10% of the population has an advanced degree, with high concentrations in some areas (say, Palo Alto, CA). Higher degree communities share attributes such as: being close to a major university, research center, center of high-tech industry or research and a large city.

Based on an analysis of 2006 to 2008 data, census researchers found that the difference in annual earnings between getting a professional degree, such as a master’s or doctoral degree, and dropping out of high school was about $72,000, five times the $13,000 annual wage difference between genders.

However, the value of the dollar for the bachelor’s degree is dropping still. A study from the Economic Policy Institute reports for new college grads: “after gains in the 1980s and particularly in the 1990s, hourly wages for young college-educated men in 2000 were $22.75, but that dropped by almost a full dollar to $21.77 by 2010. For young college-educated women, hourly wages fell from $19.38 to $18.43 over the same period. Now, with unemployment expected to remain above 8% well into 2014, it will likely be many years before young college graduates — or any workers — see substantial wage growth.”

The fact that we still have about 20% of our population who do not have a high school diploma, for one reason or another, is a little frightening.

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37 comments

Income doesn't just depend on the number of years in school  it depends on WHAT you study, how many years you work, your career continuity, the hours per week worked, etc. When those factors are taken into account, ALL the research finds that the average woman earns just as much as the average man. But, Care2 writers are far too invested in promoting their woman-as-victim mentality to care about actual research.

No amount of education is a guarantee to ANYTHING- not a job, and certainly not a set salary. There are a lot of "educated idiots" out there whose "knowledge" is not worth the paper their degree is printed on. Then we have colleges that are watering down their curriculum and easing standards to increase GPAs and graduation rates. In the end I would have to say that a college degree (especially considering the massive amount of debt students take on) is not something young people should feel compelled to do. As long as the person has a good head on their shoulders, I would value experience over education any day of the week!

Call me unrealistic and childish, bleh, maybe I am, but who cares how much you make through all that knowledge? Money comes and goes soooo easily. Hell, you could become a millionaire just by buying a random lottery ticket!! Its having knowledge, and using knowledge to help mother earth and society that matters the most.
Maybe life with all its worries and responsibilites never gives us a chance to see that tools like money and knowledge and talents etc etc are only there for us to help one another, but look at the filthy rich, why do you think many of them spend so much on charity, or even give up all their money to it?

Ok I don't really get to have an opinion here because I am 60 and disabled. Having said that, I recently graduated with a BLS. I took one class a semester, paid for it by tutoring math, and took whatever interested me. Lots of math, lots of sociology, lots of psychology and Latin American studies. I started in Electrical Engineering but when I found that I would not be able to keep my job I switched to learning for the sake of learning. Do to the lack of degree goal I only took one class I didn't love and dropped it mid-semester in order to avoid potential jail time for throttling the professor.

If I were to give anyone advice, it would be do what interests you and makes you happy. Money is just pieces of paper and you will never have enough stuff to make you happy. Follow your passion and you will be great at whatever you do. Me, I am a great math tutor; I do it because I love helping people get on with their education. The more math you take the more of your brain you get to keep later in life. I also have found that the self satisfaction people get from mastering math allows them to do anything from that point on.